One of Ottawa’s fastest-growing technology companies since Shopify Inc. has raised US$65-million to expand a business that got its start serving clients of the city’s software giant – and now competes with it for talent.
Rewind Software Inc. said New York private capital giant Insight Partners led the funding, which was also backed by past investors Bessemer Venture Partners, Inovia Capital, Ridge Ventures, ScaleUP Ventures and FundFire, plus Atlassian Ventures and Union Ventures.
The venture capital financing follows a US$15-million venture capital raise announced by Rewind in January, making it the latest in a recent string of fast-growing Canadian technology companies to reveal back-to-back venture fundings.
Rewind’s software automatically backs up and recovers data for clients of cloud-based software used by small and medium-sized businesses, including that provided by Shopify, to ensure they don’t lose vital data such as customer records and pricing and product information. Rewind constantly retrieves and stores the latest data from its 40,000-plus customer accounts, which is encrypted and stored with Amazon Web Services. In addition to small businesses, Rewind’s client list also includes large brands Staples, HBO and Pampers.
Rewind has increased revenue by 600 per cent over the past three years and now generates between US$10-million and US$20-million annually. It has doubled its staff so far this year to about 110 people. It plans to nearly triple in size to 300 people by the end of 2022.
Data loss is a serious problem for cloud software users; a recent survey by Oracle and KPMG found 49 per cent of organizations discovered they had lost data stored on cloud services. Other startups, including OwnBackup Inc. and Veeam Software Corp. AG, that provide similar backup services for large business users of Salesforce, Microsoft 365 and Google software have raised hundreds of millions of dollars apiece and achieved multibillion-dollar valuations.
Insight operating partner John True, whose firm backed OwnBackup and Veeam, said most players in the market focus on large enterprise users, leaving “a great opportunity for Rewind. We were really excited because Rewind fits a gap in the market we know those other companies aren’t interested in in the near term.”
Rewind was founded in 2015 by Ottawa technology sector veterans Mike Potter, the chief executive, and his friend James Ciesielski, chief technology officer. They wanted to build a Shopify app in their spare time and launched the first iteration of Rewind’s product for free on Shopify’s app store for its merchants that June. Rewind garnered about 100 installs a month to start.
In December, 2015, a customer contacted Rewind in a panic to say they had lost all their data. With Rewind’s software, they quickly restored everything. “From that point on we knew we had a pretty good business,” Mr. Potter said. The company began charging customers the next month.
Mr. Potter said he initially hoped to sell the venture to Shopify. Instead, Rewind expanded its product offering to clients of Shopify rival Big Commerce and QuickBooks, and later software vendors GitHub and Trello. Now, “we’re competing for the same talent” as Shopify, Mr. Potter said. His company has even hired five Shopify alumni, including Rewind’s vice-president of product, Casey McKinnon.
ScaleUP partner Matt Roberts, one of Rewind’s first backers, said it “is not a Shopify story any more.” The previous funding was meant to help Rewind show it could “build product and opportunity off the Shopify platform,” while the new Insight-led financing “is an endorsement that the strategy has been a success” and will fuel Rewind’s expansion.
Mr. True said Rewind would use the funding to “rapidly accelerate” its rollout of backup products for users of other cloud software. The company says products are in the works for customers of Xero, GitLab, Zendesk, Jira, Hubspot, Basecamp and Asana, among other software. Mr. True said Rewind will also spend on marketing and sales, in which it has “underinvested” to date.
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